Q. Our bank doesn’t want to give us a mortgage on a lot we want to buy. We’re going to build a house there. What do you suggest?
A. Yes, banks are reluctant to lend for vacant land. And do-it-yourselfers, particularly those on a shoestring, can find it difficult to obtain financing. Lenders fear they’ll end up with unfinished problem construction as security for their loan.
It’s easiest if you are working with a large builder, who may finance the construction or help you arrange a building loan that later converts to a mortgage. Otherwise you’ll have to buy with all cash or persuade the seller to hold a mortgage.
Building loans are most readily obtained after you have taken all the necessary steps to have your plans and lot approved by local authorities. And the good news is once the land is paid for, you could count it toward a down payment to qualify for a permanent loan.
Q. We are selling our home and moving out of town, and it looks like that will take place next week. I mentioned to our agent that an electrician is coming to remove the dining room chandelier, which we will be keeping for our new home. He said we don’t have any right to do that. I’ve already bought a replacement that will be installed at the same time. Do you see any problem with that?
A. You have at least a potential problem. Prudent buyers will ask for a last-minute walk-through just before the closing. If they want that specific fixture, you may have some trouble. They offered to buy the real estate, which includes anything permanently attached to it, and you signed an acceptance. If you intended to take the chandelier, it would have been a good idea to say so…